# In the matter of Kalpesh Ramniklal Shah vs. Mundara Estate Developers Limited & Ors.

> NCLAT judgment dated 2023-07-14. Citation: TCN-2023-NCLAT-00372. This appeal was filed by a Suspended Director of the Corporate Debtor against the order dated…

- **Court:** NCLAT
- **Order date:** 14 Jul 2023
- **Citation:** TCN-2023-NCLAT-00372
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kalpesh-ramniklal-shah-vs-mundara-estate-developers-limited-ors-aa3124e2

## Summary

### Background

This appeal was filed by a Suspended Director of the Corporate Debtor against the order dated 12.01.2023, by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, which admitted a Section 7 application filed by the Respondent – Financial Creditor. The Corporate Debtor entered into an agreement on 27.01.2011 with Metrochem Industries Ltd. (now Metroglobal Ltd.) for a repayment of a principal amount of Rs. 24 crores, with 11 post-dated cheques given, and an interest amount of Rs. 13.50 crores to be paid through the issuance of 05 post-dated cheques. A further agreement dated 28.12.2012 was entered for a payment of Rs. 46 crores. A Section 7 application was filed in June 2021 seeking initiation of CIRP against the Corporate Debtor for default of an

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## Facts

The Corporate Debtor, Metrochem Industries Ltd. (now Metroglobal Ltd.), entered into an agreement dated 27.01.2011 with the Financial Creditor for a repayment of a principal amount of Rs. 24 crores, with 11 post-dated cheques given, and an interest amount of Rs. 13.50 crores to be paid through the issuance of 05 post-dated cheques. A further agreement dated 28.12.2012 was entered for a payment of Rs. 46 crores. The Financial Creditor issued a legal notice to the Corporate Debtor on 27.05.2016 for payment of the outstanding amount. A Section 7 application was filed in June 2021 seeking initiation of CIRP against the Corporate Debtor for default of an amount of Rs. 89,76,41,443/-, with outstanding principal amount being Rs. 19,63,71,657/- and interest of Rs.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in admitting the Section 7 application filed by the …

**Ratio:** The Adjudicating Authority is required to admit a Section 7 application when a default of

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**Reasoning:** The court found that the Corporate Debtor had defaulted on its financial obligations to

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The court applied the ratio to the facts of the case and found that the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Kalpesh Ramniklal…
- **Respondents:** Metrochem…; Mundara Estate…

## Timeline

- **2011-01-27 — Agreement between Corporate Debtor and…**: The Corporate Debtor entered into an agreement with Metrochem Industries Ltd. (now…
- **2012-12-28 — Further Agreement between Corporate Debtor and…**: A further agreement was entered…

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